Core view
In the first quarter of 2022, the tax-free sales of outlying islands increased by + 8.4% year-on-year. In the first quarter of this year, the amount of duty-free shopping on Hainan outlying islands was 14.72 billion yuan, up + 8.4% year-on-year and + 5.71% month on month; The number of shopping pieces was 20.27 million, a year-on-year increase of + 14.2%; The per capita shopping amount was 8372 yuan, a year-on-year increase of + 10.2%; The number of duty-free shoppers was 1.76 million, with a year-on-year increase of – 1.56% and a month on month increase of + 11%.
All operators have strengthened the publicity of online member purchase China Tourism Group Duty Free Corporation Limited(601888) part of the merchandise discount was increased from 8.5% to 7.5%, part of the fragrance brand full reduction was slightly tightened, Lancome, Estee Lauder, etc. were reduced from 7.5% to 7.8%, compared with the same period last year, they did not pay attention to their own profits. The general discount in the store: 7.5%, 8%, 8.5%.
The inbound and outbound passenger flow of airports in Hainan Island is only 212000 per week, which is lower than the level in the same period in 2020. From February 28 to April 3, the inbound and outbound passenger flow of the three airports on the island was – 61.42% year-on-year, of which the passenger flow of Sanya Phoenix Airport was only 30% of that of the same period last year. Haikou has achieved dynamic social clearance, and Sanya Haitang Bay duty-free city resumed business on April 11.
The passenger throughput of Haikou airport in March was – 52.72% year-on-year, and the cumulative year-on-year throughput in the first quarter was – 5.93%. In March 2022, the passenger throughput of Meilan Airport was only 978100 person times, with a year-on-year increase of – 52.72% and a month on month increase of – 2.35%. In the first quarter, the cumulative passenger throughput of Haikou airport was 4.4567 million, a year-on-year increase of – 5.93%, recovering to 61.89% in the same period in 2019.
Investment suggestion: the drainage capacity of Hainan continues to be enhanced to help the subsequent passenger flow recovery. The tax-free revenue of outlying islands continues to grow, superimposed on the landing of the new harbor tax-free City, with prominent scale effect, which is expected to drive the continuous improvement of the profit end of China tax exemption. We expect the company to realize a net profit attributable to the parent company of RMB 9.592/11.461/16.068 billion in 2021 / 2022 / 2023, corresponding to pe44.4 billion respectively 6/28.0/20.0X。
Risk warning: repeated outbreaks in China; Sales are less than expected; Changes in immigration policies; Increased competition.
